UIDAI is developing a mobile app that can scan fingerprint and iris IDs, when paired with suitable hardware.

Correction: A previous version of this story carried a misleading headline and incorrectly said Aadhaar was replacing PIN in online and card transactions. The error is regretted.

The government is building an Aadhaar-linked payments systems that will likely emerge as an alternative to online and card transactions. This follows in the wake of demonetisation and the government's push to make India a cashless economy. According to the Times of India, the Unique Identification Authority of India (UIDAI) is developing a mobile app that will enable shopkeepers, merchants or individuals to receive payments. The authentication in this case will be done by scanning the finger print of the iris, which will also require mobile devices equipped with necessary hardware.

AB Pandey, CEO of UIDAI, told TOI that online transactions between two people having bank accounts linked with Aadhaar can be done by just feeding the 12-digit unique identification number in a mobile device that is equipped with the Aadhaar-enabled app. The app can authenticate the fingerprints or iris of the person making the payment.

According to the Economic Times, Pandey said that the government has already initiated efforts to implement Aadhaar-enabled transactions, and is talking to mobile manufacturers, merchants and banks. The move is being driven by NITI Aayog.

"We are asking mobile manufacturers to see if all mobiles made in India should be inbuilt with iris or thumb identification system to help Aadhaar-enabled transactions," NITI Aayog CEO Amitabh Kant told ET.

Pandey pointed out that the Andhra Pradesh government is already using the Aadhaar-enabled system in fair price shops. "Aadhaar-enabled transactions are card-less and PIN-less," he said, adding that many people anticipated Aadhaar's role in online transactions which is reflected in the huge jump in enrolments.